A good $30,000 car that costs $300,000 to make.

A couple of weeks back, I blogged about the State of California’s use of monthly user fees on utilities to create massive programs to benefit alternative energy (“Robbin’ the ‘Hood”: California’s Green Energy Schemes Benefit the Well-Connected). One of the highlighted programs will build 10 refueling stations for hydrogen vehicles at a cost of $15 million. That’s chump change compared to the $1.6 billion total the state spends to encourage green programs, but at $66,000 per H2 vehicle currently on the road, it seems a bit … lavish.

But what the hey,

Most of the hydrogen vehicles currently on the road in California are powered by fuel cells, not hydrogen combustion. Inside a fuel cell, oxygen and hydrogen combine to form water vapor. Electricity is created in the process and is stored in on-board batteries. NASA has always used fuel cells to generate electricity in space vehicles.

General Motors, Diamler and BMW have hydrogen vehicles in research or on the road as limited test-market vehicles (BMW’s version is a gasoline-hybrid internal combustion engine, not a fuel cell). The industry leader is Honda.

To a select market in Southern California, Honda offers very attractive terms on its Clarity FCX model:

36 month lease @ $600 per month (total of payments = $21,600)

Lease includes maintenance and collision insurance*

Available in any color, as long as it’s Star Garnet Metallic.

Why Southern California? That’s where the dealerships and refueling stations are. The Clarity has a range of about 240 miles, so you don’t want to wander far away. Fuel cells have problems with freezing weather. Perhaps most importantly to Honda’s corporate goals, Southern California is where the target market of eco-friendly celebrities lives. As we will see, the Clarity is more about PR than it is about profitability.

Hydrogen fuel cells are relatively expensive to produce. As of October 2009, Fortune magazine estimated the cost of producing the Honda Clarity at $300,000 per car. Many designs require rare substances such as platinum as a catalyst. In 2010, a new nickel-tin nanometal catalyst was tested to lower the cost of fuel cells.

Little wonder that Honda plans to make “about 200″ vehicles available to the SoCal market over the next 3 years. Assuming they “only” lose $250,000 per unit, that’s a $50,000,000 cost. For that, Honda reinforces its claim on the title of “Greenest Automaker“.

Hydrogen can be produced by electrolysis from water, the problem being that it takes more energy to split the hydrogen from the oxygen in H2O than you get from recombining them in a fuel cell. The electricity, therefore, must be very cheap and not accessible to the grid (where it has higher value; California has the highest electricity rates of all the states except Alaska and Hawaii.) Frequent commenter citizenkh reminded us in the comments to the previous blog (op cit) that hydrogen is a byproduct of some industrial processes and may be available in certain locations as an industrial gas; I have no idea the source for California’s refueling stations.

But Honda will also sell its lucky lessee a Home Energy Station which is used to generate hydrogen in the comfort and (relative) safety of ones own home. What does the HES use as a source? Why, natural gas, that awful fossil fuel. Honda says that a household with a fuel cell car and an HES has a CO2 impact with is 30% less than a similar household with a gasoline-powered car and conventional heating and cooling. Given the cost, that’s a pretty modest benefit in my book.

Seriously, I don’t begrudge celebrities like Ms. Curtis or her husband, rock legend Nigel Tufnel for driving a hydrogen-powered car. After all, if Honda is willing to put one in their garage at something less than a tenth of the true cost, why not? But let’s not kid ourselves about the short- or even medium-term viability of fuel cells in passenger cars. And let’s not indulge the fantasy that California is effectively taxing its populace for anything resembling a common benefit. These vehicles run less on hydrogen than they do on high-octane corporate marketing.

While researching for this post, I nearly laughed out loud upon reading the following scientific non-sequitur at Honda’s website:

The FCX Clarity FCEV does not use any gasoline whatsoever. It runs on clean, domestically produced compressed hydrogen gas. Hydrogen is the most abundant element in the universe.

I’ll answer that one with a quote from my favorite modern composer:

Some scientists claim that hydrogen, because it is so plentiful, is the basic building block of the universe. I dispute that. I say there is more stupidity than hydrogen, and that is the basic building block of the universe.

– Frank Zappa

* Which makes sense, because who other than Honda would underwrite insurance on a $300,000 Clarity?